Below-target tax collections amid sluggish economic growth has forced CS Henry Rotich to tighten allocations to free funds for priority sectors in Mr Kenyatta’s second term in office. The lower-than-expected tax revenue affected allocations to development projects in the first half of this financial year which ended in December. The development budget fell by Sh45.17 billion in five months to November, compared with the same period last year. Each ministry, department and agency has been asked to justify any cash demand outside regular allocations and its impact on economic growth before the cash is released from the Exchequer. Analysts have flagged the widening budget deficit, which results in increased borrowing, as a major threat to this year’s economic growth outlook of between 5.5 per cent and 6 per cent.

Source: Daily Nation January 07, 2018 09:56 UTC